Below is an Income and cash flow statements that management has approved.  (If there are errors or oversights, that is...

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Below is an Income and cash flow statements that management has approved.  (If there are errors or oversights, that is their problem, not yours).  Start each question from the original data.  Cells F14:F22 contain the original values in case you need to get back to them.  Show or explain how you obtained each answer.  
aDetermine the unit price that would achieve a cash flow in year 6 of $500,000  
bDetermine the sensitivity of the internal rate of return to a 10%, 25% and 50% increase in investment? (start with original values)  
cDetermine the expected present worth for the following data where Forecast 1 is the current values. (start with original values)  
  Forecast 1 (current Values)Forecast 2Forecast 3cell   
 Unit Price$35.99 $40.00 $35.00 C14   
 COGS each$12.50 $15.00 $11.50 C15   
 S.G. & A.$800,000 $1,000,000 $900,000 C16   
 Sales Quantity Forecast year 150,000 40,000 60,000 D23   
 Probability50%30%20%    
         
     Original Values   
 Unit Price$35.99   $35.99    
 COGS each$12.50   $12.50    
 S.G.& A.$800,000   $800,000    
 salvage$100,000 in year 6 $100,000    
 Income tax rate35%  35%   
 Capital Gains Tax rate15%  15%   
 Working capitalno change  no change   
 MARR15%  15%   
 Investment$2,000,000   $2,000,000    
 Sales Quantity Forecast 50,000 60,000 72,000 86,400 103,680 124,416
 Depreciation MACRS520.00%32.00%19.20%11.52%11.52%5.76%
         
 Income Statement0123456
 Sales revenue  $1,799,500 $2,159,400 $2,591,280 $3,109,536 $3,731,443 $4,477,732
 Cost of goods sold  ($625,000)($750,000)($900,000)($1,080,000)($1,296,000)($1,555,200)
 Gross Margin $1,174,500 $1,409,400 $1,691,280 $2,029,536 $2,435,443 $2,922,532
 General, Sales and Admin. ($800,000)($800,000)($800,000)($800,000)($800,000)($800,000)
 Depreciation  ($400,000)($640,000)($384,000)($230,400)($115,200)($57,600)
 EBIT ($25,500)($30,600)$507,280 $999,136 $1,520,243 $2,064,932
 Income tax  $8,925 $10,710 ($177,548)($349,698)($532,085)($722,726)
 Net income  ($16,575)($19,890)$329,732 $649,438 $988,158 $1,342,206
         
 Cash Flow Statement       
 Net Income ($16,575)($19,890)$329,732 $649,438 $988,158 $1,342,206
 Add depreciation  $400,000 $640,000 $384,000 $230,400 $115,200 $57,600
 Investment(2,000,000)           
 Change in Working Capital ($179,950)($35,990)($43,188)($51,826)($62,191)($74,629)
 Salvage      $100,000
 Tax on gain      $15,000
 Cash flow ($2,000,000)$203,475 $584,120 $670,544 $828,013 $1,041,167 $1,440,177
         
  Present Worth =IRR     

 

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